dmertz
Level 15

Retirement tax questions

The only way that the amount could show up on Form 1040 line 3b as ordinary dividends is if you entered it as a Form 1099-DIV instead of as a Form 1099-R.  Perhaps it's actually on line 4b, not on line 3b.

 

The amount should be included on Form 1040 line 4a but be excluded from taxable income on line 4b.  When entering the Form 1099-R as a Form 1099-R, make sure to indicate to TurboTax that the distribution was from an inherited account.  With the online version that is done by marking checkbox.  in the desktop version you must answer Yes when asked the horribly worded question that asks if the IRA was inherited from [financial institution].